Pension Reform Committee Holds Second Meeting
Democratic Party: "Fear-Mongering Frame of Fund Depletion"
People Power Party: "Fiscal Stability Must Be Maintained"
On April 30, members of the National Assembly's Special Committee on Pension Reform voiced differing opinions regarding the depletion of the National Pension Fund. The People Power Party emphasized fiscal stability, while the Democratic Party of Korea argued that the ultimate purpose of the pension system is to guarantee income in old age.
Democratic Party lawmaker Kang Sunwoo stated at the committee's plenary meeting that day, "Describing the fund as depleted distorts the structure of discussions about the public's old age and instills fear, effectively threatening people." Kang characterized the debate over pension fund depletion as a "fear-mongering frame."
According to Kang, South Korea ranks first in terms of the ratio of the National Pension Fund to GDP, and third in absolute size, following the United States and Japan. Kang remarked, "South Korea is a country with a sufficiently large fund," and added, "Considering the original purpose of the National Pension, fiscal stability is a tool to guarantee income in old age."
Kang further explained, "Even if the fund is entirely depleted, it does not mean the collapse of the pension system. Alternatives such as changing the way finances are managed or switching to a different contribution method should be considered." Kang emphasized, "Ultimately, the fundamental goal of fiscal stability is to guarantee income in old age, not to endlessly accumulate the fund itself."
In contrast, Woo Jaejoon, a lawmaker from the People Power Party, stressed the importance of fiscal stability, stating, "Protecting the fund is an important value."
Woo argued, "If the fund is large, we can return profits from its management to the people," and added, "Because the fund has increased to 1,200 trillion won compared to the past, we can expect a 5.5% rate of return."
He continued, "The accumulated fund can serve as a mechanism to cushion the shock from rapid demographic changes," and predicted, "If the fund is fully depleted, the burden will become extremely heavy, as we would have to cover it through taxes or various insurance premium rates."
Democratic Party lawmaker Oh Ki-hyung also agreed with Woo's point about the need to prevent the fund's depletion, emphasizing the importance of securing the fund's fiscal stability. Oh proposed improving the fund's rate of return, discussing increases to the insurance premium rate, and ensuring the fund's sustainability by addressing blind spots as ways to prevent depletion.
Previously, on March 20, the National Assembly held a plenary session and passed an amendment to the National Pension Act, completing parametric reforms. The core of the amendment is to raise the national pension insurance premium rate to 13% and the income replacement rate to 43%. The amendment also includes expanding credits for military service and childbirth, strengthening support for insurance premiums for low-income regional subscribers, and stipulating a guarantee of pension payments.
Afterward, a special committee on pension reform was formed to discuss further structural reforms, but the momentum appears to have been lost due to the major event of the presidential election. Even this meeting was held three weeks after the first plenary session on April 8.
Yoon Youngseok, a People Power Party lawmaker and chair of the special committee, stated at the plenary session, "The parametric reform bill passed by the National Assembly in March was significant as it passed under difficult circumstances," but added, "It only slightly delayed the timing of fund depletion and falls short of a fundamental plan."
He continued, "The youth of the 2030 generation are demanding a fundamental structural reform of the pension system with voices that border on desperate cries," and urged, "The special committee must respond to these public demands."
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